Competing for Bushels: Beyond Price

The Common Challenge: Price Pressure

Grain originators frequently face pressure from farmers and competitors. It’s a familiar conversation - “Your bid is 10 cents lower than the co-op down the road. Why can’t you match it?”

Why Price isn’t Everything

While it’s tempting to adjust bids to win business, chasing the highest price isn’t always sustainable. Successful grain elevators differentiate themselves in ways beyond just price, such as:

• Speed and Efficiency: A farmer may wait in a four-hour line elsewhere, while your elevator gets them dumped in 10 minutes.
• Superior Service: Faster payment processing, expert guidance, and reliable logistics make a difference.
• Consistency: Farmers value trust and stability over time, not just a one-time high bid.

Educating Your Customers

Grain originators must be proactive in explaining their value proposition. Instead of simply competing on price, they should highlight the benefits of working with them.

Turning Price Conversations into Opportunity

A team of merchandisers and originators at a grain elevator recognized the importance of clear communication when facing price competition. They developed a strategy where originators were equipped with key talking points that emphasized their elevator’s service advantages - such as efficiency, reliability, and personalized support. By proactively addressing farmer concerns, they were able to maintain strong business relationships and uphold margin integrity without always matching the highest bid.

Key Takeaway: Price matters, but long-term relationships and service can outweigh temporary price gaps.

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